Minerals Resource Rent Tax Repeal and Other Measures Bills passed

02 Sep 2014

On 1 September 2014, the House of Representatives resolved that Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No 2] ("the 2013 Bill) be "laid aside" (that is, not proceeded with). This follows the impasse between the House and the Senate, the latter insisting on its amendments to the 2013 Bill and the House refusing to agree to those amendments.

The Senate's amendments involved the removal of provisions repealing the low income superannuation contribution (Schedule 7), the income support bonus (Schedule 8), and the Schoolkids Bonus (Schedule 9).

On 2 September 2014, the Senate passed the 2014 Bill with Government amendments. The House agreed to the amendments on the same day, with the result that the Bill has now passed both Houses of Parliament and now awaits Royal Assent.

As introduced and passed by the House, the 2014 Bill contained the same measures that were contained in the 2013 Bill, including those which the Senate sought to remove by its previous amendments. However, the 2014 Bill as most recently passed by the Senate on 2 September merely defers the repeal date of those three measures in Schedules 7, 8 and 9 (see below), rather than removing the repeal provisions altogether. The amendments also delay the scheduled increase in the Superannuation Guarantee charge percentage, which will now not reach 12% until the year commencing 1 July 2025. Pending the repeal of the Schoolkids Bonus, the amendments also apply an income test limiting eligibility to families with an adjusted taxable income of $100,000 or less.

According to the Explanatory Memorandum, as supplemented by the Supplementary Explanatory Memorandum, the 2014 Bill repeals the Minerals Resource Rent Tax (MRRT) by repealing the Minerals Resource Rent Tax Act 2012 and associated acts and makes consequential amendments to other legislation, including the ITAA 1997 and the Taxation Administration Act 1953, required as a result of the repeal of the MRRT.

The 2014 Bill also repeals or revises MRRT-related measures.

Specifically, the 2014 Bill repeals the following measures:

loss-carry back (Schedule 2);

geothermal expenditure deduction (Schedule 5);

low income superannuation contribution for the 2017-18 and later financial years (Schedule 7);

the income support bonus from 31 December 2016 (Schedule 8); and

Schoolkids Bonus from 31 December 2016 (Schedule 9).

The 2014 Bill also revises the following MRRT-related measures:

capital allowances for small business entities (Schedules 3 and 4); and

Specifically, in relation to the Superannuation Guarantee (SG) charge percentage, the charge percentage will remain at 9.5% up to and including the year commencing 1 July 2020, and will increase by 0.5% each year thereafter until it reaches 12% in the year commencing 1 July 2025.

In a joint media release dated 2 September 2014, the Treasurer, Joe Hockey, and the Acting Assistant Treasurer, Mathias Cormann, commented on the passage of the Bill.